Midday: Aus shares sink more than 1%

Market Reports

The Australian share market dropped more than 1 per cent at open after global markets dropped on tensions for Greece’s debt deal and weaker growth in Europe and China. At noon local equities are down more than 1 per cent with the latest local GDP figures failing to impress. The miners have fallen to the worst performing sector, but the telco’s have been buoyed on news Telstra Corporation Limited (ASX:TLS)  has finalised agreements to participate in the rollout of the National Broadband Network.

The S&P/ASX 200 index has retreated 44 points and is 4,160. On the futures market the SPI is 50 points down.

Economic news

Australia’s economy grew less than expected in the last three months of year. According to the Australian Bureau of Statistics gross domestic product expanded 0.4 per cent in the December quarter of 2011 and 2.3 per cent in the full 2011 calendar year.

Company news

Shares in Austar United Communications Limited (ASX:AUN) have risen to the best performer at noon after the regional pay-TV provider and its suitor Foxtel responded to an inquiry from the Australian Competition and Consumer Commission. Austar says it welcomes the ACCC’s market inquiry on Foxtel’s draft undertakings and is optimistic the competition regulator will make a decision before the end of this month. Shares in Austar United Communications risen 5.15 per cent, trading at $1.43.

Shares in Kagara Limited (ASX:KZL) have slumped to the worst performer after exiting a trading halt today, losing more than a third of their value at noon as investors digest a busy week of announcements. The Queensland metals producer yesterday posted a first half net loss of $48.9 million, announced job cuts and flagged the suspension of less profitable operations. On Monday Kagara said it had offloaded its nickel assets to Western Areas NL (ASX:WSA) for $68 million. Kagara said today its founding chairman Kim Robinson will step down but remain on the board as non-executive director as part of a board restructure. Shares in Kagara have slumped 37.1 per cent, trading at $0.195.

Best and worst performers

The best performing sector is Telco Services adding 2 points to 1,116. Shares in Telecom Corporation of New Zealand (ASX:TEL) have risen 2.13 per cent and trading at $1.78. Shares in Singapore Telecommunications Limited (ASX:SGT) and Telstra Corporation Limited (ASX:TLS) are also higher.

The worst performing sector is Materials, pulling back 168 points to 10,767. Shares in PanAust Limited (ASX:PNA) have fallen 3.25 per cent, trading at $3.27. Shares in Iluka Resources Limited (ASX:ILU) and James Hardie Industries SE (ASX:JHX) are also down at noon.

New Zealand

The NZSX50 is 12 points lower at noon: Taking a look at the top four stocks by turnover, Telecom Corporation of New Zealand is at the top of the list with stock 1.32 per cent higher at $2.30, followed by Fletcher Building, Westpac and Chorus.   

Gold and the dollar

Gold is trading at $US1,674 an ounce.
The Australian dollar is buying $US1.0533.